Getting Mobile

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The business news in Brunei recently had a Scandinavian feel, with the announcement that Sweden's Ericsson, the world's largest supplier of mobile phone network technologies, will soon be setting up shop in the sultanate.

The decision to establish a local office, rather than continuing to run Brunei operations out of Singapore, came less than a month after Ericsson won the race to remodel the mobile network for Brunei's DataStream Technology (DST). The deal leaves Ericsson in charge of transfiguring DST's system from its existing, second generation (2G) platform, to a new third generation (3G) one.

Mobile phones have become an increasingly profitable area in the local economy. The introduction of 3G is expected to bring users greater access to file-sharing, entertainment downloads and mobile internet access through an improved download speed of 3.6 Megabits per second (Mbps), which is expected to eventually rise to 14.4Mbps.

On a practical level, given the comparatively low incidence of fixed-line internet connections in Brunei and consumer complaints of expense and sluggishness that have beset the broadband industry, 3G internet technology could well facilitate mobile phone companies in gaining the upper hand over their less flexible competitors.

With a per capita GDP of $25,600, Brunei's consumers have eagerly taken to the growing availability of such technical gadgetry.

Catching on to this potential, Brunei's Baiduri Bank has launched FAST, a mobile-compatible banking service, through which customers can manage accounts and process transactions from their handsets. The mobility and convenience evident in FAST has been matched by's handset-accessible business directory, a number-retrieval service available to any JAVA-enabled mobile phone. With already said to be discussing their mobile business directory system with potential foreign investors, both initiatives demonstrate just how responsive the market for mobile-related products has become. Equally significant is their role in bringing business and financial matters into the day-to-day lives of Bruneians.

The size of Brunei's mobile market provides some explanation for this progress. According to market observers, there are an estimated 440,000 mobile subscriptions in Brunei, meaning there is a penetration rate of 114% against the population of 370,000.

As a result, mobile phone operators are looking to expand their network of services beyond Brunei. As TelBru managing director, Song Kin Koi, said, "With the saturated market, we plan to look at opportunities outside Brunei; that is the next phase of our development."

Although similarly advanced markets, notably Singapore's, could be a hazardous place for TelBru to cut its teeth against foreign competition, there is optimism that successes could be achieved in less developed Southeast Asian countries such as Vietnam and Indonesia, which have attained only around 30% penetration in their large populations.

Encouraging signs are already afoot, as TelBru is part of ACASIA, an alliance of the seven largest telecommunications providers in Southeast Asia. Meanwhile, TelBru's rival, DST, has courted travelling customers by spreading its roaming services across 30 nations and four continents. In addition, both networks have slashed overseas tariffs in a move intended to encourage - and profit from - Brunei's increasing communication with the outside world.

The very existence of competition between DST and TelBru can be regarded the fruit of a continuing ambition to develop a robust and modern market. Until 2006, the government held control of the sultanate's telecommunications industry through Jabatan Telekom Brunei (JTB). TelBru was the company formed in the privatisation, and while it inherited JTB's infrastructure, the door has been opened to competition.

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